Growth Stock and Value Stock

Growth and value are two styles in stock and stock based mutual fund investing. Growth investors invest in companies that offer strong earnings growth while value investors invest in stocks that appear to be undervalued by the marketplace.

Historical Perspective:
Growth stocks generally perform better when interest rates are falling and company earnings are rising. They are also known to perform poorly first when the economy starts cooling.

Value stocks often relatively do very well early in an economic recovery but are more likely to lag Growth stocks in a sustained bull market.